Palestinians wave flags during a public screening of Palestinian President Mahmoud Abbas' speech at the United Nations, in the West Bank city of Ramallah September 23, 2011. Abbas asked the United Nations on Friday to recognize a state for his people, even though Israel still occupies its territory and the United States has vowed to veto the move. (REUTERS/DARREN WHITESIDE)

RAMALLAH, WEST BANK — Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas captivated the United Nations General Assembly Friday in an historic exchange that broke a lot of the rules.

Appearing just an hour apart on the world body’s stage, the two men lashed out at each other and recounted each side’s painful narrative.

The exchange concluded with a Palestinian appeal to the United Nations to recognize a Palestinian state and liberate, what Mr. Abbas called, the only people still under occupation today, and with an Israeli insistence that peace and security must come before any Palestinian state can be accepted.

Breaking from his normally pro-U.S. position, it was one of the most unexpected performances of Mr. Abbas’s career.

Shunning his normal diplomatic ways, he laid the blame for the failure of the Israeli-Palestinian peace process at the feet of Mr. Netanyahu and his government’s policy of expanding settlements in the Palestinian territories.

“Enough, enough, enough,” Mr. Abbas cried.

Crowds that had gathered in Ramallah and other Palestinian cities and towns were thrilled by the normally dour leader’s vehemence.

Diplomats in the United Nations General Assembly auditorium also were effusive in their praise — rising repeatedly in sustained applause as Israeli and U.S. delegates looked on stone-faced.

By comparison, the Israeli leader’s remarks enjoyed less support.

Mr. Netanyahu, too, set aside diplomacy and described the very hall in which he spoke as “the theatre of the absurd.”

He accused Mr. Abbas of lying.

“The truth,” Mr. Netanyahu said, is that “the Palestinians have refused to negotiate.”

He challenged the Palestinian leader to meet him that very day in the UN building. His feisty remarks, addressed to his home audience, fell largely on deaf ears.

There were no rallies in Israeli town squares hanging off Mr. Netanyahu’s remarks.

In fact, his speech was not even seen by most Israelis since it took place in New York and was after dark on the evening of the Sabbath in Israel.

But all the applause in the world isn’t going to get Mr. Abbas the state he seeks.

In the real world, outside the United Nations, the Palestinian leader faces a stark choice: either he agrees to the kind of terms proposed this week by the U.S. administration (a return to talks with only a partial or temporary halt to settlement construction and a nod to Israel’s status as a Jewish state), or he prepares for a new war against Israel — a non-violent, diplomatic one that follows the strategy of boycotts, sanctions and disinvestment.

Many Palestinians are hoping for the latter.

“This could be Israel’s South Africa moment,” says Diana Buttu, a Canadian-born Palestinian and former legal adviser to Mr. Abbas.

Mr. Abbas’s speech suggests that even he, the Palestinian champion of the two-state solution, is prepared for that battle.

The Palestinian leader made a point of saying he didn’t want to isolate or delegitimize Israel — however, the unspoken part of that remark is that he’s willing to do just that if it’s necessary.

And, for the first time, Mr. Abbas acknowledged that the ongoing settlement construction “threatens to also undermine the structures of the Palestinian Authority and even end its existence.”

Should Mr. Abbas’s Palestinian Authority collapse it would dump the entire administration of the West Bank back in Israel’s lap.

In effect, Mr. Abbas’s remarks were a threat to Mr. Netanyahu, a final warning that he had better halt settlements construction and return to negotiations.

Mr. Abbas has argued for a two-state solution to the conflict with more vigour than any other Palestinian figure.

But the people around Mr. Abbas say that, even for him, there’s a limit to what he’ll tolerate.